SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934

[ X ] Filed by the registrant

[ ] Filed by a party other than the registrant

Check the appropriate box:

[ ] Preliminary Proxy Statement

[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))

[ X ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12

PennFed Financial Services, Inc.
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(Name of Registrant as Specified in Its Charter)

- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act

Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount Previously paid:

(2) Form, Schedule or Registration Statement no.:

(3) Filing Party:

(4) Date Filed:

September 24, 1999

Dear Fellow Stockholder:

On behalf of the Board of Directors and management of PennFed Financial
Services, Inc., we cordially invite you to attend the Annual Meeting of
Stockholders of the Company. The Meeting will be held at 10:00 a.m., local time,
on Wednesday, October 27, 1999, at the Radisson Hotel, located at 690 Route 46
East, Fairfield, New Jersey.

An important aspect of the annual meeting process is the annual
stockholder vote on corporate business items. I urge you to exercise your rights
as a stockholder to vote and participate in this process. Stockholders are being
asked to consider and vote upon (i) the election of two directors of the Company
and (ii) the ratification of the appointment of the Company's auditors. In
addition, the Meeting will include management's report to you on the Company's
1999 financial and operating performance.

We encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, please read the enclosed proxy statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the Meeting.

Your Board of Directors and management are committed to the continued
success of PennFed Financial Services, Inc., and the enhancement of your
investment. As President, I want to express my appreciation for your confidence
and support.

Very truly yours,

/s/Joseph L. LaMonica

Joseph L. LaMonica
President and Chief
Executive Officer

PENNFED FINANCIAL SERVICES, INC.
622 Eagle Rock Avenue
West Orange, New Jersey 07052-2989
(973) 669-7366

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 27, 1999

Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of PennFed Financial Services, Inc. (the "Company") will be held at
the Radisson Hotel, located at 690 Route 46 East, Fairfield, New Jersey, at
10:00 a.m., local time, on Wednesday, October 27, 1999.

A Proxy Card and a Proxy Statement for the Meeting are enclosed.

The Meeting is for the purpose of considering and acting upon:

1. The election of two directors of the Company;

2. The ratification of the appointment of Deloitte &
Touche LLP as auditors for the Company for the fiscal
year ending June 30, 2000;

and such other matters as may properly come before the Meeting, or any
adjournments or postponements thereof. The Board of Directors is not aware of
any other business to come before the Meeting.

Any action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record at the close of business on
September 10, 1999 are the stockholders entitled to vote at the Meeting and any
adjournments or postponements thereof. A complete list of stockholders entitled
to vote at the Meeting will be available for stockholders at the offices of the
Company during the ten days prior to the Meeting, as well as at the Meeting.

You are requested to complete and sign the enclosed Proxy Card which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you attend and vote at the
Meeting in person.

By Order of the Board of Directors

/s/William C. Anderson

William C. Anderson
Chairman of the Board
West Orange, New Jersey
September 24, 1999

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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF
MAILED WITHIN THE UNITED STATES.
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PROXY STATEMENT

PENNFED FINANCIAL SERVICES, INC.
622 Eagle Rock Avenue
West Orange, New Jersey 07052-2989
(973) 669-7366

ANNUAL MEETING OF STOCKHOLDERS
October 27, 1999

This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of PennFed Financial Services, Inc. (the
"Company") of proxies to be used at the Annual Meeting of Stockholders of the
Company (the "Meeting") which will be held at the Radisson Hotel, located at 690
Route 46 East, Fairfield, New Jersey, on Wednesday, October 27, 1999, at 10:00
a.m., local time, and all adjournments or postponements of the Meeting. The
accompanying Notice of Annual Meeting and form of proxy and this Proxy Statement
are first being mailed to stockholders on or about September 24, 1999. Certain
of the information provided in this Proxy Statement relates to Penn Federal
Savings Bank ("Penn Federal" or the "Bank"), a wholly owned subsidiary of the
Company.

At the Meeting, stockholders of the Company are being asked to consider
and vote upon (i) the election of two directors of the Company and (ii) the
ratification of the appointment of Deloitte & Touche LLP as the Company's
auditors for the fiscal year ending June 30, 2000.

Vote Required and Proxy Information

All shares of the Company's common stock represented at the Meeting by
properly executed proxies received prior to or at the Meeting and not revoked,
will be voted at the Meeting in accordance with the instructions thereon. If no
instructions are indicated, properly executed proxies will be voted for the
nominees named in this Proxy Statement and for the ratification of the
appointment of Deloitte & Touche LLP. The Company does not know of any matters,
other than as described in the Notice of Annual Meeting of Stockholders, that
are to come before the Meeting. If any other matters are properly presented at
the Meeting for action, the Board of Directors, as proxy for the stockholder,
will have the discretion to vote on such matters in accordance with its best
judgment.

Directors will be elected by a plurality of the votes cast. The
ratification of the appointment of Deloitte & Touche LLP as the Company's
auditors requires the affirmative vote of a majority of the votes cast on the
matter. In the election of directors, stockholders may either vote "FOR" both
nominees for election or withhold their votes from either nominee or both
nominees for election. Votes that are withheld and shares held by a broker, as
nominee, that are not voted (so-called "broker non-votes") in the election of
directors will not be included in determining the number of votes cast. For the
proposal to ratify the appointment of the independent auditors, stockholders may
vote "FOR," "AGAINST" or "ABSTAIN" with respect to this proposal. Proxies marked
to abstain will have the same effect as votes against the proposal, and broker
non-votes will have no effect on the proposal. The holders of at least one-third
of the outstanding shares of the common stock, present in person or represented
by proxy, will constitute a quorum for purposes of the Meeting. Proxies marked
to abstain and broker non-votes will be counted for purposes of determining a
quorum.

A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy, (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting, or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Patrick D.
McTernan, Secretary, PennFed Financial Services, Inc., 622 Eagle Rock Avenue,
West Orange, New Jersey 07052-2989.

Voting Securities and Certain Holders Thereof

Stockholders of record as of the close of business on September 10,
1999 will be entitled to one vote for each share then held. As of that date, the
Company had 8,847,410 shares of common stock issued and outstanding. The
following table sets forth, as of September 10, 1999, information regarding
share ownership of: (i) those persons or entities known by management to
beneficially own more than five percent of the common stock; (ii) the Chief
Executive Officer of the Company and each of the executive officers of the
Company and the Bank whose salary and bonus for fiscal 1999 exceeded $100,000
(the "Named Officers"); and (iii) all directors and executive officers of the
Company and the Bank as a group. For information regarding the beneficial
ownership of common stock by directors of the Company, see "Proposal I. Election
of Directors--General."

Shares Percent
Beneficially of
Beneficial Owner Owned Class
- ------------------------------------------------- ------------ ------

PennFed Financial Services, Inc. 925,051(1) 10.46%
Employee Stock Ownership Plan
622 Eagle Rock Avenue
West Orange, New Jersey 07052-2989

Tontine Financial Partners, L.P. 767,100(2) 8.67
Tontine Management, L.L.C.
Tontine Overseas Associates, L.L.C.
Jeffrey L. Gendell
200 Park Avenue
Suite 3900
New York, New York 10166

John Hancock Mutual Life Insurance Company and 611,000(3) 6.91
John Hancock Subsidiaries, Inc.
P.O. Box 111
Boston, Massachusetts 02117
and
The Berkeley Financial Group and
John Hancock Advisors, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199

Named Officers(4)
- -----------------
Joseph L. LaMonica 486,464 5.30
President and Chief
Executive Officer

Patrick D. McTernan 220,381 2.45
Senior Executive Vice President,
General Counsel and Secretary

Lucy T. Tinker 226,699 2.52
Senior Executive Vice President
and Chief Operating Officer

Jeffrey J. Carfora 68,742 0.77
Executive Vice President and
Chief Financial Officer

Barbara A. Flannery 67,238 0.76
Executive Vice President and
Retail Banking Group Executive of the Bank

Directors and executive officers 1,887,198 18.73
of the Company and the Bank
as a group (10 persons)(5)

footnotes follow

- --------------
(1) The amount reported represents shares held by the PennFed Financial
Services, Inc. Employee Stock Ownership Plan (the "ESOP"), 364,344 of
which have been allocated to accounts of participants. First Bankers
Trust Company, Quincy, Illinois, the trustee of the ESOP, may be deemed
to beneficially own the shares held by the ESOP which have not been
allocated to the accounts of participants. Pursuant to the terms of the
ESOP, participants in the ESOP have the right to direct the voting of
shares allocated to participant accounts. Unallocated shares are voted
by the trustee in the same proportion that the allocated shares are
voted pursuant to participant instructions.

(2) As reported by Tontine Financial Partners, L.P. ("TF"), Tontine
Management, L.L.C. ("TM"), Tontine Overseas Associates, L.L.C. ("TO")
and Jeffrey L. Gendell on Amendment No. One dated October 15, 1998 to a
Schedule 13D filed with the Securities and Exchange Commission (the
"SEC"). TM is general partner of TF and Mr. Gendell serves as the
managing member of TM and TO. With respect to the 767,100 shares
listed, TF and TM each reported shared voting and dispositive powers
over 424,600 shares, TO reported shared voting and dispositive powers
over 342,500 shares and Mr. Gendell reported shared voting and
dispositive powers over all 767,100 shares.

(3) As reported by John Hancock Mutual Life Insurance Company ("JHMLIC"),
JHMLIC's wholly-owned subsidiary, John Hancock Subsidiaries, Inc.
("JHSI"), JHSI's wholly-owned subsidiary, The Berkeley Financial Group
("TBFG"), and TBFG's wholly-owned subsidiary, John Hancock Advisers,
Inc., ("JHA") in a statement as of December 31, 1998 on Amendment No. 4
to a Schedule 13G filed with the SEC. JHMLIC, JHSI, and TBFG reported
indirect beneficial ownership of these shares. JHA reported sole voting
and dispositive powers as to all of such shares.

(4) Includes shares held directly, shares allocated to the accounts of the
Named Officers under the ESOP, as well as shares held jointly with
family members, in retirement accounts, in a fiduciary capacity, by
certain members of the Named Officers' families, by trusts of which the
Named Officer is a trustee or substantial beneficiary, with respect to
which the Named Officer may be deemed to have sole or shared voting
and/or dispositive powers. Also includes 334,417, 143,784, 156,101,
42,834 and 42,834 shares which Mr. LaMonica, Mr. McTernan, Ms. Tinker,
Mr. Carfora and Ms. Flannery, respectively, have the right to acquire
pursuant to stock options that are currently exercisable.

(5) This amount includes shares held directly, shares allocated to the
accounts of executive officers under the ESOP, as well as shares held
jointly with family members, in retirement accounts, in a fiduciary
capacity, by certain of the group members' families, by certain related
entities or by trusts of which the group member is a trustee or
substantial beneficiary, with respect to which shares the group member
may be deemed to have sole or shared voting and/or dispositive powers.
This amount also includes an aggregate of 1,226,066 shares which
directors and executive officers as a group have the right to acquire
pursuant to stock options that are currently exercisable, and excludes
12,160 shares of which Mario Teixeira, Jr., a director of the Company,
disclaims beneficial ownership.

PROPOSAL I. ELECTION OF DIRECTORS

General

The Company's Board of Directors consists of six members, each of whom
is also a director of the Bank. Each of the current directors of the Company has
served in such capacity since its incorporation in March 1994. The Board is
divided into three classes, each of which contains one-third of the Board.
One-third of the directors are elected annually. Directors of the Company are
generally elected to serve for three-year terms or until their respective
successors are elected and qualified.

The following table sets forth certain information, as of September 10,
1999, regarding the composition of the Company's Board of Directors, including
each director's term of office. The Board of Directors acting as the nominating
committee has recommended and approved the nominees identified in the following
table. It is intended that the proxies solicited on behalf of the Board of
Directors (other than proxies in which the vote is withheld as to a nominee)
will be voted at the Meeting FOR the election of the nominees identified below.
If a nominee is unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitute nominee as the Board of
Directors may recommend. At this time, the Board of Directors knows of no reason
why either nominee may be unable to serve, if elected. Except as disclosed in
this Proxy Statement, there are no arrangements or understandings between the
nominee and any other person pursuant to which the nominee was selected.

Shares of
Common Stock Percent
Position(s) Held Director Term to Beneficially of
Name Age in the Company Since(1) Expire Owned(2) Class
- ------------------------------- ----- ---------------- -------- -------- ---------- ------

NOMINEES

Patrick D. McTernan 47 Director, Senior 1989 2002 220,381 2.45%
Executive Vice
President, General
Counsel and Secretary
Marvin D. Schoonover 49 Director 1990 2002 87,630 0.98

DIRECTORS CONTINUING IN OFFICE

Joseph L. LaMonica 49 Director, President and 1987 2000 486,464 5.30
Chief Executive Officer
Mario Teixeira, Jr. 63 Director 1971 2000 167,827(3) 1.88
William C. Anderson 51 Chairman of the Board 1979 2001 450,728 4.92
Amadeu L. Carvalho 70 Director 1990 2001 106,183 1.19

- ------------

(1) Includes service as a director of the Bank prior to the formation of the
Company.

(2) Amounts include shares held directly, as well as shares held jointly with
family members, in retirement accounts, in a fiduciary capacity, by certain
members of the director's family, held by certain related entities or held
by trusts of which the director is a trustee or substantial beneficiary,
with respect to which shares the respective director may be deemed to have
sole or shared voting and/or dispositive powers. Amounts also include
143,784, 56,933, 334,417, 64,333, 318,897 and 60,933 shares which Messrs.
McTernan, Schoonover, LaMonica, Teixeira, Anderson and Carvalho,
respectively, have the right to acquire pursuant to stock options that are
currently exercisable. With respect to Messrs. LaMonica and McTernan,
amounts also include 13,045 shares which have been allocated to each of
their respective accounts under the ESOP.

(3) Amount excludes 12,160 shares of which Mr. Teixeira disclaims beneficial
ownership.

The principal occupation of each director of the Company and each of
the nominees for director is set forth below. All directors and nominees have
held their present principal occupation for at least five years unless otherwise
indicated.

Patrick D. McTernan--Mr. McTernan has been Executive Vice President,
General Counsel and Secretary of the Company since its incorporation. He joined
Penn Federal in 1989 as Senior Vice President and General Counsel and was
promoted to Executive Vice President and General Counsel in 1992. He was named
Senior Executive Vice President in 1999. He also serves as corporate Secretary.
Prior to his employment with the Bank, he was a partner in the law firm of Adams
and McTernan located in South Orange, New Jersey. He is currently a member of
the Legal Committee of the New Jersey Savings League.

Marvin D. Schoonover--Mr. Schoonover is a Senior Account Executive with
the EMAR Group, Inc., an insurance agency located in Livingston, New Jersey, and
is responsible for the marketing, sales and servicing of commercial property and
casualty insurance. Mr. Schoonover first joined the EMAR Group, Inc. in 1980.
Mr. Schoonover also is a licensed real estate salesperson.

Joseph L. LaMonica--Mr. LaMonica has been President and Chief Executive
Officer of the Company since its incorporation in March 1994, and of Penn
Federal since 1988. Mr. LaMonica has served Penn Federal in various capacities
since joining the Bank in 1980. He also is a member of the Board of Directors of
the Saint James Foundation, a philanthropic organization, and serves in an
advisory capacity to the Ironbound Ambulance Squad.

Mario Teixeira, Jr.--Mr. Teixeira has been a licensed funeral director
since 1961. He is owner and President of the Buyus Funeral Home in Newark and
owns the Bernauer Funeral Home and the Rucki Funeral Home, both located in
Newark, as well as the Shaw-Buyus Home for Services, located in Kearny, New
Jersey. In addition, Mr. Teixeira is a partner in BRSB Preneed Association, a
partnership specializing in funeral services.

William C. Anderson--Mr. Anderson has been Chairman of the Board of the
Company since its incorporation in March 1994. Mr. Anderson is also the Chairman
of the Board and President of John Young Company, Inc., a real estate agency
located in Caldwell, New Jersey.

Amadeu L. Carvalho--Mr. Carvalho, retired Controller of the Singer
Company, currently is in private accounting practice in Elizabeth, New Jersey.
His practice includes tax services and business and strategic planning for small
and medium size companies.

Meetings and Committees of the Board of Directors

Meetings and Committees of the Company. Meetings of the Company's Board
of Directors are generally held on a monthly basis. For the fiscal year ended
June 30, 1999, the Board of Directors met 17 times. During fiscal 1999, no
incumbent director of the Company attended fewer than 75% of the aggregate of
the total number of Board meetings and the total number of meetings held by the
committees of the Board of Directors on which he served. The Board of Directors
of the Company has standing Executive and Audit Committees.

The Executive Committee is comprised of all members of the Board. The
Executive Committee meets on an as needed basis and exercises the power of the
Board of Directors between Board meetings, to the extent permitted by Delaware
law. This Committee did not meet during fiscal 1999.

The Audit Committee is comprised of Chairman Anderson (Chairman) and
Directors Carvalho and Teixeira. The Audit Committee reviews audit reports and
related matters to ensure compliance with regulatory and internal policies and
procedures. The Audit Committee met two times in fiscal 1999.

The entire Board of Directors acts as a nominating committee for
selecting nominees for election as directors. While the Board of Directors of
the Company will consider nominees recommended by stockholders, the Board has
not actively solicited such nominations. The Board of Directors met one time in
fiscal 1999 in its capacity as a nominating committee.

Pursuant to the Company's bylaws, nominations for directors by
stockholders must be made in writing and delivered to the Secretary of the
Company at least 60 days prior to the meeting date. If, however, less than 70
days' notice of the date of the meeting is first given or made to stockholders
by public notice or mail, nominations must be received by the Company not later
than the close of business on the tenth day following the earlier of the day on
which notice of the date of the meeting was mailed or public announcement of the
date of the meeting was first made. In addition to meeting the applicable
deadline, nominations must be accompanied by certain information specified in
the Company's bylaws.

Meetings and Committees of the Bank. The Bank's Board of Directors
generally meets twice per month and may have additional special meetings upon
the written request of the Chairman of the Board, the President or at least
three directors. The Bank's Board of Directors met 24 times during the fiscal
year ended June 30, 1999. During fiscal 1999, no incumbent director of the Bank
attended fewer than 75% of the aggregate of the total number of Board meetings
and the total number of meetings held by the committees of the Board of
Directors on which he served. The Bank has standing Audit, Human Resources and
Compensation Committees, as well as other committees which meet periodically.
Set forth below is a description of certain committees of the Bank.

The Audit Committee is responsible for the oversight of the Bank's
Internal Audit Department and for the review of the Bank's annual audit report
prepared by the Bank's independent auditors. Only non-employee directors may
serve on the Audit Committee. The current members of the committee are Chairman
Anderson (Chairman) and Directors Carvalho and Teixeira. The Audit Committee met
four times during fiscal 1999.

The Bank's Human Resources Committee is responsible for the review and
approval of the numerous personnel policies of the Bank. This Committee
addresses, among other things, the Bank's benefit programs and plans and
affirmative action plan. The current members of the Human Resources Committee
are Directors Teixeira (Chairman), Schoonover and LaMonica. The Committee met
one time during fiscal 1999.

The Bank's Compensation Committee, which acts as the compensation
committee of the Company and the Bank, determines salary ranges and incentive
compensation. This Committee is also responsible for administering the Stock
Option and Incentive Plan and Management Recognition Plan (the "MRP"). The
current members of the Compensation Committee are Directors Carvalho (Chairman)
and Teixeira. This Committee met one time during the fiscal year ended June 30,
1999.

Director Compensation

The Company's directors are not paid fees for their service in such
capacity. Non-employee directors of the Bank were each paid a fee of $33,000 for
fiscal 1999 except for the Chairman who received $69,000. Each non-employee
director also received $400 for attendance at each meeting of the Board's
standing committees and $5,000 for the payment of an annual life insurance
premium.

Executive Compensation

The following table sets forth information regarding compensation paid
or granted to the Named Officers.

==========================================================================================================================
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------------
Long-Term
Compensation
--------------------------
Annual Compensation Awards
- -------------------------------------------------------------------------------------------------------
Restricted Securities
Stock Underlying All Other
Salary Bonus Award(s) Options Compensation
Name and Principal Position Year ($) ($) ($) (#) ($)(1)
- --------------------------------------------------------------------------------------------------------------------------

Joseph L. LaMonica, 1999 $328,922 $ --- --- --- $60,554
President and Chief 1998 290,004 --- --- 100,000(2) 60,685
Executive Officer 1997 290,004 29,000 --- --- 46,363

Patrick D. McTernan, 1999 $190,977 $ --- --- --- $51,634
Senior Executive Vice President, 1998 183,762 --- --- 24,000(2) 53,222
General Counsel and Secretary 1997 181,500 18,500 --- --- 40,859

Lucy T. Tinker, 1999 $190,977 $ --- --- --- $55,290
Senior Executive Vice President 1998 185,000 --- --- 25,000(2) 56,611
and Chief Operating Officer 1997 184,760 18,500 --- --- 42,882

Jeffrey J. Carfora, 1999 $116,461 $ --- --- --- $40,899
Executive Vice President and 1998 110,000 --- --- 15,000(2) 43,595
Chief Financial Officer 1997 110,000 --- --- --- 32,385

Barbara A. Flannery 1999 $116,461 $ --- --- --- $40,343
Executive Vice President 1998 110,000 --- --- 15,000(2) 43,425
and Retail Banking Group 1997 99,359 --- --- --- 30,332
Executive of the Bank
==========================================================================================================================

(1) Includes term life insurance premiums, income attributable under whole-life
insurance policy, employer contributions to Penn Federal's 401(k) Plan and
ESOP allocations, respectively, for fiscal 1999, 1998 and 1997 as follows:
Mr. LaMonica - 1999: $1,148, $15,109, $2,800 and $41,497; 1998: $1,148,
$12,014, $2,496 and $45,027; and 1997: $892, $9,078, $2,732 and $33,661;
Mr. McTernan - 1999: $660, $6,915, $2,562 and $41,497; 1998: $660, $5,495,
$2,040 and $45,027; and 1997: $700, $4,142, $2,356 and $33,661; Ms. Tinker
- 1999: $732, $11,629, $1,432 and $41,497; 1998: $732, $9,326, $1,526 and
$45,027; and 1997: $706, $7,129, $1,386 and $33,661; Mr. Carfora - 1999:
$518, $0, $2,329 and $38,052; 1998: $436, $0, $1,883 and $41,276; and 1997:
$462, $0, $1,650 and $30,273; and Ms. Flannery - 1999: $518, $0, $1,747 and
$38,078; 1998: $437, $0, $1,650 and $41,338; and 1997 - $419, $0, $1,490
and $28,423.

(2) Adjusted for the two-for-one stock split in the form of a 100% stock
divided paid on the Company's common stock on February 10, 1998 (the "Stock
Split").

The following table sets forth certain information concerning stock
option exercises during the last fiscal year and the number and value of stock
options held by the Named Officers as of June 30, 1999. No stock options were
granted to the Named Officers in fiscal 1999.

=======================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
- -----------------------------------------------------------------------------------------------------------------------
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-Money Options
on Value Options at FY-End (#)(2) FY-End ($)(3)
Exercise Realized --------------------------------------------------------------
Name (#)(2) ($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------

Joseph L. LaMonica --- --- 334,417 33,333 $2,811,375 ---
Patrick D. McTernan 20,000 $186,250(1) 140,700 8,000 $1,309,350 ---
Lucy T. Tinker --- --- 153,517 8,333 $1,436,925 ---
Jeffrey J. Carfora --- --- 39,750 5,000 $312,375 ---
Barbara A. Flannery --- --- 39,750 5,000 $312,375 ---

(1) Represents the difference between the market value of the shares acquired
upon exercise at the time of exercise ($14.5625 per share, the average of
the high and low per share prices of the common stock on the Nasdaq
National Market on the date of exercise) and the exercise price ($5.25 per
share).

(2) Amounts have been adjusted for the Stock Split.

(3) Represents the aggregate market value (market price of the common stock
less the exercise price) of the in-the-money options based upon the
exercise price of the options and the closing price of the common stock on
the Nasdaq National Market on June 30, 1999 ($15.75). An option is
in-the-money if the exercise price of the option is less than the market
value of the common stock. None of the unexercisable options were
in-the-money as of June 30, 1999.

Employment Agreements

On July 14, 1994, the Bank entered into employment agreements with
Messrs. LaMonica and McTernan and Ms. Tinker, and on July 14, 1998, the Bank
entered into employment agreements with Mr. Carfora and Ms. Flannery. Each
employment agreement provides for an annual base salary in an amount not less
than the employee's salary as of the time the agreement was executed and an
initial term of three years. Each agreement provides for extensions of one year,
in addition to the then-remaining term under the agreement, on each anniversary
of the effective date of the agreement (i.e., each July 14), subject to a formal
performance evaluation performed by disinterested members of the Board of
Directors of the Bank. Each agreement provides for termination upon the
employee's death, for cause or in certain events specified by Office of Thrift
Supervision ("OTS") regulations. Each employment agreement is also terminable by
the employee upon 90 days' notice to the Bank.

Each employment agreement provides for payment to the employee of the
greater of his or her salary for the remainder of the term of the agreement, or
299% of the employee's base compensation, in the event there is a "change in
control" of the Bank where employment terminates voluntarily or involuntarily in
connection with such change in control or within 12 months thereafter. This
termination payment is subject to reduction by the amount of all other
compensation to the employee deemed for purposes of the Internal Revenue Code of
1986 to be contingent on a "change in control," and may not exceed three times
the employee's average annual compensation over the most recent five year period
or be non-deductible by the Bank for federal income tax purposes. For purposes
of the employment agreements, a "change in control" is defined as any event
which would require the filing of an application for acquisition of control or
notice of change in control pursuant to 12 C.F.R. ss.ss. 574.3 or 574.4. Such
events are generally triggered prior to the

acquisition of control of 10% of the Company's common stock. Each agreement also
guarantees participation in an equitable manner in employee benefits applicable
to executive personnel.

Based on his or her current salary, if Mr. LaMonica, Mr. McTernan, Ms.
Tinker, Mr. Carfora and Ms. Flannery had been terminated as of June 30, 1999,
under circumstances entitling him or her to severance pay as described above, he
or she would have been entitled to receive a lump sum cash payment of
approximately $1,758,992, $928,230, $906,442, $414,019 and $377,440,
respectively.

Certain Transactions

The Bank has followed a policy of granting loans to eligible directors,
officers, employees and members of their immediate families for the financing of
their personal residences and for consumer purposes. All loans by the Bank to
its senior officers and directors are subject to OTS regulations restricting
loans and other transactions with affiliated persons of the Bank. Under
applicable law, all loans or extensions of credit to executive officers and
directors must be made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
the general public and must not involve more than the normal risk of repayment
or present other unfavorable features. In this regard, all outstanding loans to
the Bank's directors and senior officers have been made in the ordinary course
of business and on the same terms, including collateral and interest rates, as
those prevailing at the time for comparable transactions and did not involve
more than the normal risk of collectibility.

Compensation Committee Report on Executive Compensation

The Compensation Committee of the Company's Board of Directors has
furnished the following report on executive compensation:

Penn Fed's Compensation Committee has responsibility for reviewing the
compensation policies and plans for the Company and its affiliates. The policies
and plans established are designed to enhance both short-term and long-term
operational performance of the Bank and to build stockholder value through
anticipated appreciation in the Company's common stock price.

One of the Committee's primary objectives is to develop and maintain
compensation plans which allow the Company to attract and retain quality
executives at competitive compensation levels and which enhance stockholder
value by aligning closely the financial interests of the Company's executives
with those of its stockholders. In determining compensation levels, plans and
adjustments, the Committee takes into account, among other things, compensation
reviews made by third parties each year. These studies primarily compare the
compensation of the Bank's officers to officers of other local financial
institutions.

With respect to Mr. LaMonica's base salary for the fiscal year ended
June 30, 1999, the Committee took into account a comparison of salaries of chief
executive officers of local financial institutions. Likewise, each executive
officer's base salary was determined utilizing financial institution
compensation surveys. Mr. LaMonica's base salary for fiscal year 1999 was
increased by $40,000 from his base salary for fiscal year 1998 because the
Committee determined that Mr. LaMonica was undercompensated when compared to
chief executive officers of other institutions with the same asset size as the
Bank and because of the Company's numerous achievements during fiscal 1998
attributable to the performance of Mr. LaMonica.

The Bank and the Company have included stock option and restricted
stock awards as key elements in their total compensation package. Equity based
compensation provides a long-term alignment of interests and results achieved
for stockholders with the compensation rewards provided to executive officers by
providing those executives and others on whom the continued success of the
Company most depends with a proprietary interest in the Company. In fiscal 1995,
the Stock Option Plan and the MRP were adopted, providing for the grant of
several types of equity- based awards, including stock option and restricted
stock awards. These plans were ratified by the Company's stockholders in fiscal
1995, and an amendment to the Stock Option Plan increasing the number of shares
available for issuance under the Stock Option Plan was approved by the Company's
stockholders in fiscal 1998.

In fiscal year 1995, all of the Bank's executive officers were granted
stock option and restricted stock awards, vesting over a five-year schedule. On
December 9, 1997, all of the Bank's executive officers were granted additional

stock options. One-third of each of these additional options vested immediately
upon grant, one-third vested on December 9, 1998 and the remaining one-third is
scheduled to vest on December 9, 1999. During fiscal 1999, options to purchase
53,550 and 33,333 shares of common stock at exercise prices of $5.25 and
$17.1875, respectively (as adjusted for the Stock Split), vested for Mr.
LaMonica. In addition, 23,800 shares of restricted stock held by Mr.
LaMonica vested during fiscal 1999.

Through the compensation programs described above, a significant
portion of the Company's executive compensation is linked to corporate
performance. The Committee will continue to review all elements of compensation
to ensure that the compensation objectives and plans meet the Company's business
objectives and philosophy of linking executive compensation to stockholder
interests of corporate performance as discussed above.

In 1993, Congress amended the Internal Revenue Code of 1986 to add
Section 162(m) to limit the corporate deduction for compensation paid to a
corporation's five most highly compensated officers to $1.0 million per
executive per year, with certain exemptions. The Committee carefully reviewed
the impact of this legislation on the cost of the Bank's current executive
compensation plans. Under the legislation and regulations adopted thereunder, it
is not expected that any portion of the Company's employee compensation will be
non-deductible in fiscal 1999 or in future years by reason of compensation paid
in fiscal 1999. The Committee intends to review the Company's executive
compensation policies on an ongoing basis, and propose appropriate
modifications, if the Committee deems them necessary, to these executive
compensation plans with a view toward implementing the Company's compensation
policies in a manner that avoids or minimizes any disallowance of tax deductions
under Section 162(m).

The foregoing report is furnished by the Compensation Committee of the
Board of Directors:

Amadeu L. Carvalho, Chairman Mario Teixeira, Jr.

Stock Performance Presentation

The line graph below compares the cumulative total stockholder return
on the common stock to the cumulative total return of a broad index (all Nasdaq
U.S. Stocks) and a savings and loan industry index for the period July 14, 1994
(the date the Company became a publicly-traded company) through June 30, 1999.
While the Company's common stock was sold at $10.00 per share in the initial
public offering, the stock closed at $13.125 per share on July 14, 1994, its
first day of trading (adjusted for the Stock Split, such prices would amount to
$5.00 and $6.5625, respectively). The graph assumes that $100 was invested on
July 14, 1994 to purchase shares of the common stock at the closing price on
such date and not at the initial offering price.

Period Ending
--------------------------------------------------------------
Index 7/15/94 6/30/95 6/30/96 6/30/97 6/30/98 6/30/99

PennFed Financial Services, Inc. 100.00 96.19 118.09 209.50 256.89 246.94
NASDAQ-Total US ................ 100.00 131.22 168.47 200.93 269.77 385.84
SNL $1B-$5B Thrift Index ....... 100.00 111.96 142.84 231.42 338.36 291.02

PROPOSAL II. RATIFICATION OF THE APPOINTMENT OF AUDITORS

The Board of Directors has renewed the Company's arrangement for
Deloitte & Touche LLP to be its auditors for the 2000 fiscal year, subject to
the ratification of the appointment by the Company's stockholders. A
representative of Deloitte & Touche LLP is expected to attend the Meeting to
respond to appropriate questions and will have an opportunity to make a
statement if he or she so desires.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 2000.

STOCKHOLDER PROPOSALS

In order to be eligible for inclusion in the Company's proxy materials
for its 2000 Annual Meeting of Stockholders, any stockholder proposal to take
action at the 2000 Annual Meeting must be received at the Company's
administrative office located at 622 Eagle Rock Avenue, West Orange, New Jersey
07052-2989, no later than May 27, 2000. Any proposal submitted will be subject
to the requirements of the proxy rules adopted under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and, as with any stockholder proposal
(regardless of whether included in the Company's proxy materials), the Company's
certificate of incorporation and bylaws and Delaware law. Under the proxy rules,
in the event the Company receives notice of a stockholder proposal to take
action at the 2000 Annual Meeting that is not submitted for inclusion in the
Company's proxy materials, or is submitted for inclusion but is properly
excluded from the Company's proxy materials, the persons named in the form of
proxy sent by the Company to its stockholders intend to exercise their
discretion to vote on such proposal in accordance with their best judgment if
notice of the proposal is not received at the administrative office of the
Company by the Deadline (as defined below). In addition to the provision of the
proxy rules regarding discretionary voting authority described in the preceding
sentence, the Company's bylaws provide that if notice of a stockholder proposal
to take action at the 2000 Annual Meeting is not received at the main office of
the Company by the Deadline, the proposal will not be recognized as a matter
proper for submission to the Company's stockholders and will not be eligible for
presentation at the 2000 Annual Meeting. The "Deadline" means August 28, 2000;
however, in the event the 2000 Annual Meeting is held before October 7, 2000 or
after December 26, 2000, the "Deadline" means the close of business on the later
of the 60th day prior to the date of the 2000 Annual Meeting or the tenth day
following the earlier of the day on which notice of the 2000 Annual Meeting was
first mailed or public announcement of the date of the 2000 Annual Meeting was
first made.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons owning more than 10% of a registered class of the
Company's equity securities, to file periodic reports of ownership and changes
in ownership with the SEC and to provide the Company with copies of such
reports. Based solely upon information provided to the Company by the directors
and officers subject to Section 16(a), all Section 16(a) filing requirements
applicable to these persons were complied with during fiscal 1999, except for
the inadvertent failure to timely file a Form 3 by James M. O'Brien, Executive
Vice President and Senior Lending Officer of the Bank. Mr. O'Brien subsequently
filed a Form 3.

OTHER MATTERS

The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that the Board of Directors, as proxy for the stockholder, will act in
accordance with its best judgment.

The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Company's common stock. In addition to
solicitation by mail, directors, officers and regular employees of the Company
and/or the Bank may solicit proxies personally or by telephone without
additional compensation.

BY ORDER OF THE BOARD OF DIRECTORS

/s/William C. Anderson

William C. Anderson
Chairman of Board

West Orange, New Jersey
September 24, 1999

REVOCABLE PROXY
PENNFED FINANCIAL SERVICES, INC.

[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE

ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 27, 1999

The undersigned hereby appoints the Board of Directors of PennFed Financial
Services, Inc. (the "Company"), and its survivor, with full power of
substitution, to act as attorneys and proxies for the undersigned to vote all
shares of common stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held on Wednesday,
October 27, 1999 at the Radisson Hotel, located at 690 Route 46 East, Fairfield,
New Jersey, at 10:00 a.m., local time, and at any and all adjournments or
postponements thereof, as directed herein:

I. The election of the following directors for three-year terms:

PATRICK D. McTERNAN MARVIN D. SCHOONOVER

[ ] FOR [ ] WITHHOLD [ ] FOR ALL EXCEPT

INSTRUCTION:To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.

- --------------------------------------------------------------------------------

II. The ratification of the appointment of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending June 30, 2000.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment or postponement
thereof.

The Board of Directors recommends a vote "FOR" the nominees named herein and
"FOR" the ratification of the appointment of Deloitte & Touche LLP.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED HEREIN AND FOR THE RATIFICATION
OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED AS DIRECTED BY THE BOARD OF DIRECTORS
IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE MEETING.

Please be sure to sign and date
this Proxy in the box below.

_________________________________________
Date

_________________________________________
Stockholder sign above

_________________________________________
Co-holder (if any) sign above

Detach above card, sign, date and mail in postage-paid envelope provided.

PENNFED FINANCIAL SERVICES, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

This Proxy may be revoked at any time before it is voted by: (i) filing with
the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than this Proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the Secretary
of the Company at or before the Meeting; or (iii) attending the Meeting and
voting in person (although attendance at the Meeting will not in and of itself
constitute revocation of this Proxy). If this Proxy is properly revoked as
described above, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect.

The above signor(s) acknowledge(s) receipt from the Company, prior to the
execution of this Proxy, of a Notice of the Meeting, a Proxy Statement and the
Company's Annual Report to Stockholders for the fiscal year ended June 30, 1999.

Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.

PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL
THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE